Infrastructure Programs: What's Different About Broadband?

Infrastructure Programs: What's Different About Broadband?

ȱ
—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ
‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
‘Š›•Žœȱǯȱ ˜•??Š›‹ȱ
™ŽŒ’Š•’œ?ȱ’—ȱŽ•ŽŒ˜––ž—’ŒŠ?’˜—œȱ˜•’Œ¢ȱ
Ž——Š›?ȱ ǯȱ›ž?Ž›ȱ
™ŽŒ’Š•’œ?ȱ’—ȱŒ’Ž—ŒŽȱŠ—?ȱŽŒ‘—˜•˜?¢ȱ˜•’Œ¢ȱ
Š—žŠ›¢ȱŘŘǰȱŘŖŖşȱ
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŝȬśŝŖŖȱ
   ǯŒ›œǯ?˜Ÿȱ
ŚŖŗŚşȱ
ȱŽ™˜›?ȱ?˜›ȱ˜—?›Žœœ
Pr
epared for Members and Committees of Congress

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
ž––Š›¢ȱ
Broadband network deployment projects represent large scale, long term investments that affect
the overall productivity of economic activity in the geographic areas in which they are built, and
thus fit the conventional definition of infrastructure. But they also have several characteristics that
distinguish them from traditional infrastructure projects. These unique characteristics may dictate
that government programs in support of broadband deployment be structured differently than
conventional infrastructure programs.
Virtually all broadband networks in the United States are privately owned and financed through
private capital markets. In most geographic markets, there are two or more broadband networks
offering competing services over their own facilities, rather than a single provider. The competing
broadband networks generally employ different technologies. Currently, each of these
technologies has somewhat different capabilities. But each also is experiencing rapid
technological progress, so it is not possible to predict which technology will prove most
successful from a technical or commercial perspective. Because the capabilities of these
technologies are at various stages of development, some broadband network technologies may be
better able than others to meet a stimulus package requirement to be quickly deployable, though
perhaps at the expense of long term productivity and innovation. Most broadband network
providers are vertically integrated into the production of downstream services (applications) that
they provide to customers over their own networks. These applications compete with the
offerings of independent applications providers that also must ride over the broadband networks
to reach customers and therefore are dependent on access to those networks.
In some rural areas, a combination of limited demand and high costs preclude private capital
markets from funding broadband network infrastructure absent government intervention. In these
areas, where even a single network provider might not be able to achieve sufficient scale
economies to be able to offer “affordable” service, it would be inefficient to subsidize multiple
providers. Not to do so, however, might leave residents with inferior broadband service choices
relative to urban residents.
While upgrades to traditional infrastructure tend to have a quantitative impact on the services that
ride over that infrastructure (for example, increasing the number of cars that can ride over a
highway or the speed of a train riding over a rail bed), upgrades to broadband infrastructure also
potentially have a transformative impact on the services that ride over that infrastructure, by
allowing for the creation of entirely new applications.
The leadership in both houses of Congress as well as the Obama administration have announced
plans to include a broadband component in the infrastructure portion of any economic stimulus
package. At the least, the unique characteristics of broadband infrastructure impose very complex
policy objectives for any broadband infrastructure program – to foster infrastructure investment
that would not otherwise be made and to create additional jobs and spending, without distorting
competition among the different broadband network technologies, without discouraging
investment and innovation by independent applications providers that need access to broadband
networks, and without subsidizing multiple inefficient providers unnecessarily.

˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
˜—?Ž—?œȱ
Introduction and Overview.............................................................................................................. 1
Public vs. Private Infrastructure ...................................................................................................... 3
Technology Generations and Their Capabilities.............................................................................. 7
Multiple, Potentially Conflicting, Public Policy Objectives ........................................................... 9
Public Objectives vs. Private Objectives....................................................................................... 13
Demand Considerations................................................................................................................. 17
Constraints on Rapid Broadband Infrastructure Build-Out ........................................................... 19

Š‹•Žœȱ
Table 1. Broadband Speeds and Applications ................................................................................. 9

™™Ž—?’¡Žœȱ
Appendix. Representative List of Proposals for Government Support of Broadband
Infrastructure Investment ........................................................................................................... 21

˜—?ŠŒ?œȱ
Author Contact Information .......................................................................................................... 22

˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
—?›˜?žŒ?’˜—ȱŠ—?ȱŸŽ›Ÿ’Ž ȱ
The leadership in both houses of Congress as well as the Obama administration have announced
plans to include a broadband component in the infrastructure portion of any economic stimulus
package.1 The House Appropriations Committee has released a proposed bill that includes a
number of broadband infrastructure spending provisions,2 but it is not yet possible to assess their
scope and impact because some of the spending is targeted to “underserved areas” that are to be
defined by the Federal Communications Commission (FCC) or restricted to “open access”
networks that, also, are to be defined by the FCC. At the same time, interested parties –
broadband equipment manufacturers; large, mid-sized, and small wireline and wireless service
providers; satellite operators; telecommunications unions; consumer groups; education groups;
public safety organizations; etc. – and think tanks have unveiled a multitude of specific proposals
for government support of broadband infrastructure.3
Many of these proposals would extend far beyond traditional grant, loan, loan guarantee, and tax
incentive (accelerated depreciation or tax credit) programs.
• Some would create novel new approaches to broadband funding, for example by
floating long-term federal government “broadband bonds” to finance private
sector broadband infrastructure construction,4 by creating a government program
that would pay the interest on qualifying short- to medium-term corporate bonds
issued specifically for certain types of broadband infrastructure investment,5 or
by allowing private companies to issue “tax-credit bonds” that would qualify
bondholders to receive tax credits from the U.S. Treasury, thereby effectively
reducing the bondholders’ tax liability by an amount equal to the tax credit.6
• Other proposals would attempt to foster broadband infrastructure deployment by
expanding or limiting the current regulatory framework for broadband networks.
For example, some parties argue that network neutrality or open access
requirements discourage infrastructure investment and therefore include explicit
prohibitions or constraints on such requirements in their proposals.7 Other parties

1 See, for example, Corey Boles and Fawn Johnson, “Stimulus Plan to Include Internet-Access Funds,” The Wall Street
Journal, December 2, 2008; Anne Veigle, “House Telecom Leaders Meeting on Broadband Stimulus,”
Communications Daily, December 19, 2008, and Anne Veigle, “Reid Wants Stimulus Package to Stress Jobs,
Spending,” Communications Daily, December 23, 2008.
2 The bill is available at [http://appropriations.house.gov/pdf/RecoveryBill01-15-09.pdf].
3 A representative list of proposals is appended to this report.
4 See John Rintels, An Action Plan for America: Using Technology and Innovation to Address Our Nation’s Critical
Challenge, Benton Foundation, 2008, at p. 38, available at [http://www.benton.org/sites/benton.org/
files/Benton_Foundation_Action_Plan.pdf].
5 See S. Derek Turner, Down Payment on Our Digital Future: Stimulus Policies for the 21st-Century Economy, Free
Press, December 2008, at p. 5, available at [http://www.freepress.net/files/Down Payment_ DigitalFuture.pdf].
6 See Jeffrey A. Eisenach, Hal J. Singer, and Jeffrey D. West, Economic Effects of Tax Incentives for Broadband
Infrastructure Deployment, prepared on behalf of the Fiber-to-the-Home Council, January 5, 2009, at p. 3, available at
[http://www.ftthcouncil.org/UserFiles/File/Economic%20Effects%20of%20Broadband%20Tax%20
Incentives%20010509%20FINAL.pdf].
7 See, for example, “Promoting Broadband – USTelecom’s Advocacy Priority: Pro-investment policies and innovative
partnerships that connect all Americans to the broadband future,” USTelecom - The Broadband Association, available
at [http://www.ustelecom.org/Issues/PromotingBroadband/PromotingBroadband.html].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
claim that, left to their discretion, broadband network providers would constrain
network access in a fashion that is inconsistent with public objectives, and
therefore propose tying the level of support infrastructure providers receive to
meeting certain statutory or regulatory access requirements.8
• Yet other proposals would foster broadband deployment by boosting demand for
broadband services through subsidies for customer purchases of computers and
Internet access service.9
• Even where the proposals involve traditional grant, loan, or tax incentive
programs, some would provide higher levels of support for investment in
broadband networks that met certain threshold download and upload speeds.10
All the above parties favor government support of broadband infrastructure, though they disagree
about the form that support should take, the extent to which such support should be targeted to
specific situations, and what commitments or requirements should be attached to receipt of the
support.
Broadband network deployment projects represent large scale, long term investments that affect
the overall productivity of economic activity in the geographic areas in which they are built, and
thus fit the conventional definition of infrastructure. But they also have several characteristics that
distinguish them from traditional infrastructure projects.
• Virtually all broadband networks in the United States are privately owned and
financed through private capital markets.
• In most geographic markets, there are two or more broadband networks offering
competing services over their own facilities, rather than a single provider.
• The competing broadband networks generally employ different technologies.
• Currently, each of these technologies has somewhat different capabilities.
• But each also is experiencing rapid technological progress, so it is not
possible to predict which technology will prove most successful from a
technical or commercial perspective.
• Because the capabilities of these technologies are at various stages of
development, some broadband network technologies may be better able than

8 See, for example, the proposed “Competitive Fiber Tax Incentive Program,” which would award higher levels of
investment tax credits and accelerated depreciation to entities that deploy more than a single strand of fiber to an end-
user for the purpose of selling the fiber to a competitive provider, included in S. Derek Turner, Down Payment on Our
Digital Future: Stimulus Policies for the 21st-Century Economy, Free Press, December 2008, at pp. 19-20, available at
[http://www.freepress.net/files/Down Payment_ DigitalFuture.pdf] or the call for federal legislation to preserve open,
nondiscriminatory access to network applications and content in John Windhausen Jr., A Blueprint for Big Broadband,
an EDUCAUSE White Paper, January 2008, available at [http://net.educause.edu/ir/library/pdf/EPO0801.pdf].
9 See, for example, Letter of December 16, 2008, from Grant Seiffert, President, Telecommunications Industry
Association (TIA), to the Honorable Nancy Pelosi, Speaker of the House, the Honorable Harry Reid, Majority Leader
of the U.S. Senate, the Honorable John Boehmer, Republican Leader of the House, and the Honorable Mitch
McConnell, Republican Leader of the Senate, available at [http://www.tiaonline.org/gov_affairs /fcc_filings/
TIA_Broadband_Stimulus_Letter_FINAL.pdf].
10 See, for example, Robert D. Atkinson, Daniel Castro, and Stephen J. Ezell, The Digital Road to Recovery: A
Stimulus Plan to Create Jobs, Boost Productivity and Revitalize America, The Information Technology & Innovation
Foundation, January 2009, at p. 6, available at [http://www.itif.org/files/roadtorecovery.pdf].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Řȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
others to meet a stimulus package requirement to be quickly deployable,
though perhaps at the expense of long term productivity and innovation.
• Most broadband network providers are vertically integrated into the production
of downstream services (applications) that they provide to customers over their
own networks. These applications compete with the offerings of independent
applications providers that also must ride over the broadband networks to reach
customers and therefore are dependent on access to those networks.
• In some rural areas, a combination of limited demand and high costs preclude
private capital markets from funding broadband network infrastructure absent
government intervention. In these areas, where even a single network provider
might not be able to achieve sufficient scale economies to be able to offer
“affordable” service, it would be inefficient to subsidize multiple providers. Not
to do so, however, might leave residents with inferior broadband service choices
relative to urban residents.
• While upgrades to traditional infrastructure tend to have a quantitative impact on
the services that ride over that infrastructure (for example, increasing the number
of cars that can ride over a highway or the speed of a train riding over a rail bed),
upgrades to broadband infrastructure also potentially have a transformative
impact on the services that ride over that infrastructure, by allowing for the
creation of entirely new applications.
These unique characteristics may dictate that government programs in support of broadband
deployment be structured differently from conventional infrastructure programs. At the least, they
result in very complex policy objectives – to foster infrastructure investment that would not
otherwise be made and to create additional jobs and spending, without distorting competition
among the different broadband network technologies, without discouraging investment and
innovation by independent applications providers that need access to broadband networks, and
without subsidizing multiple inefficient providers unnecessarily.
ž‹•’ŒȱŸœǯȱ›’ŸŠ?Žȱ —?›Šœ?›žŒ?ž›Žȱ
Infrastructure refers to those capital structures that facilitate economic and social activity in a
society, contributing to both the private production of goods and services and the public provision
of services as varied as education, public safety, and defense. Most infrastructure – roads,
highways, mass transit, bridges, ports, airports, dams, flood control systems, drinking water
systems, wastewater systems, etc. – is owned and managed by governmental entities at the
federal, state, or local level.
There are several reasons why most infrastructure is “public” rather than “private.” In many
situations, there may be no efficient mechanism for directly collecting revenues from users and
other beneficiaries of the infrastructure or, even if such a mechanism exists, it might be difficult
to place a monetary value on the positive “externalities” associated with the infrastructure, such
as reduced travel time or increased economic development that redounds to the benefit of all
residents. For example, although advances in computers and electronic sensor technology might
make it feasible sometime in the near future to collect fees from vehicles that travel over city
streets, it might continue to be difficult to collect fees from other beneficiaries, such as shop
owners, or to determine the appropriate price to charge the beneficiaries of the positive
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
řȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
externalities. In such situations, it often will be more efficient for a government entity to fund the
infrastructure project from general or targeted tax revenues (perhaps supplemented by revenues
generated from government or quasi-government bond issues or user fees), than for a private
company, which cannot readily capture the economic value of the externalities, to attract private
equity and debt funding for the project (even with some government subsidy to cover the social
benefits).11
Even where a private company likely could attract the necessary private equity and debt funding
for an infrastructure project, a government entity might believe that public ownership of that
infrastructure would better facilitate the attainment of other public objectives, or that the
particular infrastructure is so closely tied to specific public objectives that it should be publicly
owned. For example, a government entity might believe that it would be easier to coordinate
planning across multiple publicly owned transportation systems that are all focused on attaining a
regional transportation goal than to coordinate with private systems that have their own profit
maximization goals. Or a government entity concerned about providing equal service to all
residents in a jurisdiction might believe that it would be easier to do so by extending government
owned infrastructure into areas where there is insufficient underlying demand to justify
investment absent government support than to create incentives for private entities to serve those
areas. Or where the underlying cost structure is likely to yield only a single, natural monopoly –
where scale economies will allow for only a single efficient provider – the government entity
might believe that a government-owned entity would be more sensitive to public objectives than a
government-regulated private company. In most of these cases, the public infrastructure projects
nonetheless will have a private sector component in that usually private companies compete for
government contracts to construct, maintain, and sometimes even operate these facilities.
Despite the preponderance of public infrastructure, there is a significant – and growing – amount
of privately owned infrastructure. Historically, such infrastructure most commonly has been
provided in a regulated monopoly environment, for two reasons. Given the scale economies
associated with much infrastructure, often only one provider can attain efficient scale. A
government frequently will choose to regulate that provider to protect customers from possible
price gouging. Alternatively, where it might not even be viable for a single provider to deploy the
infrastructure without some government subsidy, or where the potential for market growth is so
limited that private equity and debt markets are unlikely to come forward with funds absent some
government guarantee, it might be easier for a private firm to attract the necessary funds if it were
granted a government-sanctioned monopoly with a guaranteed rate of return.
Most oil and gas pipelines and most of the electric transmission grid are privately owned, but
these private infrastructure investments generally have been provided under a common carrier
regime, where the providers operate as government regulated monopolies, typically subject to rate
of return regulation or some other form of price regulation and mandatory non-discriminatory
access to the facilities. When the government has sought to foster investment in these privately

11 There may be exceptions, for example under certain circumstances private investors will have the incentive to invest
in toll roads that might otherwise be built and operated by a governmental agency. But even in these situations,
typically such projects only involve the maintenance and operation of an already existing road or only move forward if
the governmental agency has provided the investors with rights-of-way to the land the highway is occupying and the
private investors are not required to purchase that land. As explained by Felix Rohatyn and Everett Ehrlich in “A New
Bank To Save Our Infrastructure,” New York Review of Books, Volume LV, Number 15, October 9, 2008, at p. 27,
“Under these arrangements, the state or city sells the road and the right to set and collect tolls on it to a private
company – in essence, a new form of government borrowing.”
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Śȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
owned infrastructure systems, one means used was to increase the provider’s allowed rate of
return to a premium over a competitive level, to help attract capital.12
As the users of privately owned infrastructure have begun to have access to alternative facilities,
some government regulators have begun to ease some of their regulations. For example, privately
owned on-shore liquefied natural gas (LNG) import regasification terminals are no longer subject
to non-discriminatory access requirements. In its 2002 Hackberry decision, FERC eliminated the
requirement for terminal owners to offer tariffed, non-discriminatory rates,13 concluding that such
deregulation (which was not extended to pipelines) would increase the incentive for private
investment in LNG terminals while potential anticompetitive abuses would be constrained by the
existence of competing off-shore terminals.14
Still, the deployment of competing privately-owned infrastructure networks is relatively rare. In
the 19th century, competing privately-owned intercontinental and regional railroads were built,
although those railroads often were provided government support through land grants or rights of
way to land (primarily west of the Mississippi River). The Pacific Railway Act of 1862 provided
extensive land grants and created 30-year government bonds to support construction of the first
intercontinental railroads. Despite the existence of multiple railroads in many communities,
widespread price collusion kept transport rates high and in 1887 Congress passed the Interstate
Commerce Act, creating the Interstate Commerce Commission, which was given authority to
regulate rates and service.
Today, electric power plants are another example of competitive privately-owned infrastructure,
with interesting public interest ramifications. Because the government would like to foster low
polluting electricity generation, but the market has not yet internalized the costs of pollution,
government programs have been proposed to foster low polluting technologies. There are a
number of alternative power plant technologies (nuclear, wind, sun, geothermal, natural gas)
potentially capable of generating electricity cleanly. As discussed in CRS Report RL34746,
Power Plants: Characteristics and Costs, by Stan Mark Kaplan, because of the different cost

12 For example, section 1241 of the Energy Policy Act of 2005 amended the Federal Power Act to direct the Federal
Energy Regulatory Commission (FERC) to establish rules for incentive-based rate regulation of electric transmission,
stating that the rules can provide a higher return on equity to attract new investment. FERC issued Order 679 to
implement section 1241, allowing for broad use of incentive regulation on the grounds that section 1223 of the Energy
Policy Act directs FERC to encourage deployment of advanced transmission technologies (available at
[http://www.ferc.gov/industries/electric/indus-act/section-1241.pdf]). Subsequently, FERC has approved incentive rates
of return that exceed the competitive rate of return for a number of electric transmission projects. Some observers,
including two FERC commissioners, have complained that FERC has been too quick to approve premium rates of
return. See, for example, Esther Whieldon, “FERC grants incentive rates for two major grid projects proposed in New
England,” Inside FERC, November 24, 2008; Craig S. Cano, “Tussle over transmission rate incentives persists as
FERC receives more petitions,” Inside FERC, August 25, 2008; Esther Whieldon, “FERC grants incentive rate
treatment for transmission projects in West, Mid-Atlantic,” Inside FERC, April 21, 2008.
13 See, for example, Energy Information Administration, “FERC’s Hackberry Decision (2002),” available at
[http://www.eia.doe.gov/oil_gas/natural_gas/analysis_publications/ngmajorleg/ferc.html], viewed on December 22,
2008.
14 In recent years, the broadband network providers also have largely succeeded in freeing themselves of open access
and non-discrimination requirements. See, for example, In the Matter of Inquiry Concerning High-Speed Access to the
Internet Over Cable and Other Facilities; Internet Over Cable Declaratory Ruling; Appropriate Regulatory Treatment
for Broadband Access to the Internet Over Cable Facilities, 17 FCC Rcd. 4798, 4799 (March 15, 2002), and In the
Matter of Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, Report and Order
and Notice of Proposed Rulemaking, 20 FCC Rcd. 14853 (September 23, 2005).
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
śȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
structures and fuel inputs of the various alternatives, government grant, loan, loan guarantee, tax
incentive, and other programs will affect these potentially competing technologies differently.
A number of providers have been attracted to the broadband network market by the potential for
substantial market growth and profitability. Private companies have raised investment funds and
deployed the broadband networks that serve the vast majority of Americans. According to the
FCC, telecommunications companies expect to make $50 billion in capital expenditures in 2008
and 2009,15 although a UBS analyst recently predicted that the economic downturn might reduce
those capital expenditures by 5 to 10%.16 Although systematic and accurate data on U.S.
households currently served by broadband networks are not available,17 based on available data
the media reform organization Free Press estimates about 7% of U.S. households are unserved.18
Most U.S. households are served by two or more broadband networks. In only a miniscule
number of cases are these networks municipally provided.
These competing broadband networks employ a wide variety of technologies or combinations of
technologies, all of which are experiencing rapid technological advances that are substantially
increasing their capabilities. The incumbent landline (telephone and cable) networks are at
varying stages of migration from copper or coaxial cable networks with limited data transmission
capabilities to hybrid copper-optical fiber or coaxial cable-optical fiber or all-fiber networks (and
increasingly incorporating Internet Protocol (IP) technologies) with high speed data capabilities.
Wireless carriers will be using newly available spectrum to deploy fourth generation wireless
technologies capable of high speed data transmission for both mobile and fixed services. Satellite
operators, too, intend to offer high speed services in the near future, though they still face
technological challenges.
While there has been substantial private sector investment in broadband networks, network
deployment has been relatively limited in very rural and other high cost areas. Data from the
FCC,19 the Pew Internet and American Life Project,20 and the Government Accountability Office
(GAO)21 indicate that broadband infrastructure is most lacking in rural and lower-income areas in
which there is less economic incentive for companies to invest. This is not surprising given that
broadband networks, no matter what technology is used, are characterized by very substantial
economies of scale; it is far more difficult to develop a business case for broadband deployment
in sparsely populated areas where there are relatively few potential customers to generate the
revenues needed to cover the high fixed upfront costs. Here, it often is difficult to justify

15 In the Matter of Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans
in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the
Telecommunications Act of 1996, Fifth Report, GN Docket No. 07-45, adopted March 19, 2008 and released June 12,
2008, at p. 37, available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-88A1.pdf].
16 “UBS predicts 10 percent carrier capex cutback,” December 13, 2008, available at [http://www.fiercetelecom.com/
story/ubs-predicts-10-percent-carrier=capex-cutback/2008-12-03].
17 Congress recently passed the Broadband Data Improvement Act (P.L. 110-385) that instructs the FCC to collect
information on unserved areas.
18 S. Derek Turner, Down Payment on Our Digital Future: Stimulus Policies for the 21st-Century Economy, Free Press,
December 2008, at p. 12, available at [http://www.freepress.net/files/Down Payment_ DigitalFuture.pdf].
19 High Speed Services for Internet Access: Status as of June 30, 2007, Federal Communications Commission, March
2008.
20 Horrigan, John B., Home Broadband Adoption 2008, Pew Internet & American Life Project, July 2008.
21 Broadband Deployment is Extensive Throughout the United States, but It Is Difficult to Assess the Extent of
Deployment Gaps in Rural Areas, U.S. Government Accountability Office, GAO-06-426, May 2006.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Ŝȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
broadband infrastructure projects, despite their positive effects on economic development, absent
some sort of government support. Broadband deployment also has been slower in areas where
relatively low household income and education levels have constrained penetration of household
computers, which in turn has dampened demand for high speed Internet access.
Some observers also have noted that the broadband networks that have been, and continue to be,
deployed in the United States tend to provide customers with less bandwidth/slower upload and
download rates than those deployed in many developed countries.22 Since there has been greater
government support of broadband investment in many of those countries, these observers have
claimed that this demonstrates that private markets, on their own, cannot provide the United
States with the most advanced networks needed to remain internationally competitive. They
would have the government support upgrades of existing broadband networks – build-outs of
fiber optic networks or other very high speed networks – through tax incentives or other
programs. Others argue that such government intervention is not needed, that the lag in
deployment of higher speed networks can be explained in part by providers not wanting to get out
in front of demand, which has not developed sufficiently yet to support these upgrades, and in
part by past delays in making spectrum available for advanced wireless services. 23 The latter, in
turn, led to decisions by wireless carriers to delay network investment in order to leapfrog from
second generation to fourth generation wireless technologies, bypassing the third generation
technologies used in Europe and Asia.
ŽŒ‘—˜•˜?¢ȱ Ž—Ž›Š?’˜—œȱŠ—?ȱ‘Ž’›ȱŠ™Š‹’•’?’Žœȱ
In the late 1990s, cable television companies began offering cable modem broadband access
service to residential (and, to a lesser extent, business) customers. This placed market pressure on
telephone companies, which began to add digital subscriber line (DSL) equipment to their
existing copper telephone lines in order to offer competing broadband access service. (DSL
technology had been available for more than a decade, but the telephone companies had not had
the incentive to deploy it, in part because there was not perceived demand for high speed access
service and in part because of concern that such a service offering might cannibalize their highly
profitable T-1 services that provided large capacity “pipes” to business customers.) Subsequently,
demand for broadband access service has grown quickly; the FCC has reported that the number of
broadband access lines increased from 2.8 million as of December 1999 to 121.2 million lines as
of December 2007.24

22 See, for example, Speed Matters: A Report on Internet Speeds in All 50 States, Communications Workers of
America, August 2008, available at [http://www.speedmatters.org/documentlibrary/sourcematerials/cwa_report_
on_internet_speeds_2008.pdf
23 See, for example, Wayne A. Leighton, Broadband Deployment and the Digital Divide: A Primer, Cato Institute
Policy Analysis No. 410, August 7, 2001, available at [http://www.cato.org/pubs/pas/pa410.pdf] and Steve Titch,
“California Proposes ‘Broadband Bonds,’” posted on February 11, 2008 at [http://www.reason.org/archives/2008/02/
california_prop.html].
24 See High Speed Services for Internet Access: Status as of June 30, 2007, Federal Communications Commission,
March 2008, at pp. 1-2, and “Federal Communications Commission Releases Data on High-Speed Services for Internet
Access: High-Speed Connections to the Internet Increased by 20% in the Second Half of 2007,” FCC News Release,
January 16, 2009. According to the FCC, as of December 31, 2007 (the most recent FCC data available), 74.0 million
of the 121.2 million total high speed lines (defined as 200 or more kbps in at least one direction) served primarily
residential end users, and of these 47.8% used cable modem technology, 35.9% used DSL, 2.3% used fiber connections
to the end user premises, and 14.0% used other types of technology, including satellite, terrestrial fixed or mobile
(continued...)
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŝȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
Along with the increase in the number of broadband access lines, there has been an increase in the
capability of those lines, in terms of their upload and download capabilities. This progress has
occurred, and continues to occur, in all the technologies offering broadband access. In policy
debates today, a distinction often is made between “current generation” and “next generation”
broadband. Current generation typically refers to currently-deployed cable, DSL, and wireless
systems, while next generation typically refers to technologies capable of offering dramatically
faster download and upload speeds. Some telephone companies, most notably Verizon, already
are replacing their legacy copper/DSL networks with fiber optic networks all the way to the
customer premise (known as “fiber-to-the-home”). Other telephone companies, such as AT&T,
are upgrading their networks by deploying optical fiber to a neighborhood node, and then using
Internet Protocol technology and improved DSL equipment to offer very high speed service.
Cable companies are beginning to install network equipment that conforms to the international
standard DOCSIS 3.0 (the third generation Data Over Cable Service Interface Specification)
developed by the industry to offer very high speed service. Now that the major wireless carriers
have acquired through FCC auctions the substantial amounts of spectrum needed to provide
fourth generation wireless service, they, too, are beginning to develop networks with substantial
broadband capabilities. Satellite technology has not yet evolved this far, so for the foreseeable
future its use for broadband service probably will be restricted to lower speed service to very
remote areas that none of the other technologies can viably serve. The next generation capabilities
of these technologies are at various levels of deployment readiness; some are already being
deployed, some are close to deployment, and some more distant from deployment.
In general, the greater the download and upload speeds offered by a broadband connection, the
more sophisticated (and potentially valuable) the applications that can be provided over the
connection. In its most recent statutorily mandated report on the deployment of advanced
services, the FCC found that “In the future, we anticipate ever-greater demand for services and
applications requiring greater bandwidth over an ever-expanding area.”25 Table 1 presents a
compilation by the California Broadband Task Force showing different broadband speed ranges
and the applications they make possible. Upgrading networks potentially allows for a
transformative, not just quantitative, jump in the applications that can be offered. This has led to a
policy debate about whether government support should be limited to infrastructure investments
capable of providing specific download and upload speeds or whether providers should get more
support for deploying networks that can offer higher download and upload speeds – or if such
requirements would distort the market in favor of particular technologies that happen to be
capable of providing such speeds at this particular point in time.26

(...continued)
wireless, and electric power lines.
25 In the Matter of Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans
in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the
Telecommunications Act of 1996,” Federal Communications Commission, Fifth Report, GN Docket No. 07-45, FCC
08-88,adopted March 19, 2008 and released June 12, 2008, at p. 36, available at: [http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-08-88A1.pdf].
26 See, for example, Cecilia Kang, “Internet Service Speed is Fast-Track Issue for New Administration,” The
Washington Post, January 13, 2009, at p. D4.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Şȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
Table 1. Broadband Speeds and Applications
Upstream and Downstream Speeds
Applications
500 kbps – 1 Mbps
voice over IP, SMS, basic email, web browsing (simple sites),
streaming music (caching), low quality video (highly
compressed)
1 Mbps - 5 Mbps
web browsing (complex sites), email (larger size
attachments), remote surveillance, IPTV-SD (1-3 channels),
file sharing (small/medium), telecommuting (ordinary), digital
broadcast video (1 channel), streaming music
5 Mbps – 10 Mbps
telecommuting (converged services), file sharing (large),
IPTV-SD (multiple channels), switched digital video, video on
demand SD, broadcast SD video, video streaming (2-3
channels), HD video downloading, low definition
telepresence, gaming, medical file sharing (basic), remote
diagnosis, (basic), remote education, building control &
management
10 Mbps - 100 Mbps
telemedicine, educational services, broadcast video SD and
some HD, IPTV-HD, gaming (complex), telecommuting (high
quality video), high quality telepresence, HD surveillance,
smart/intelligent building control
100 Mbps - 1 Gbps
HD telemedicine, multiple educational services, broadcast
video full HD, full IPTV channel support, video on demand
HD, gaming (immersion), remote server services for
telecommuting
1 Gbps – 10 Gbps
research applications, telepresence using uncompressed HD
video streams, live event digital cinema streaming,
telemedicine remote control of scientific/medical
instruments, interactive remote visualization and virtual
reality, movement of terabyte datasets, remote
supercomputing
Source: California Broadband Task Force, January 2008. (kbps or kilobits per second = 1,000 bits per second;
mbps or megabits per second = 1,000,000 kilobits per second; gbps or gigabits per second = 1,000,000,000 bits
per second)
ž•?’™•Žǰȱ˜?Ž—?’Š••¢ȱ˜—?•’Œ?’—?ǰȱž‹•’Œȱ˜•’Œ¢ȱ
‹“ŽŒ?’ŸŽœȱ
Proposals for government support of broadband network infrastructure investment are being
made within the context of economic stimulus legislation. They also are being made within the
context of growing support for some sort of “national broadband policy.” This concept has been
endorsed by the Obama campaign and transition team in its policy blueprint for technology and
innovation, which includes as objectives the deployment of next-generation broadband networks
and raising the level of U.S. broadband penetration to the highest in the world.27 A national
broadband policy or strategy also has been advocated by a broad and diverse coalition of
stakeholders – ranging from telecommunications providers to public interest groups to state and

27 Barack Obama, Connecting and Empowering All Americans Through Technology and Innovation, 2008, available
[http://obama.3cdn.net/780e0e91ccb6cdbf6e_6udymvin7.pdf].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
şȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
local governments – who have publicly issued a “Call to Action for a National Broadband
Strategy,” which endorses broad goals and identifies the need for policies to stimulate high-speed
broadband network investment and high-speed broadband adoption and use.28
Broadband infrastructure components of a stimulus package are intended to provide short term
benefits by generating jobs and spending and long term benefits by increasing the overall
productivity of the economy and promoting innovations in commercial, non-profit, and household
settings. Even the most effective government programs will have associated costs that ultimately
must be borne by someone – direct costs to current taxpayers, costs associated with government
borrowing to pay for current expenditures, costs imposed on future taxpayers when there is deficit
spending, opportunity costs imposed on other industries whose costs of capital increase when
funding is diverted through favorable government treatment to the broadband sector, social costs
if potentially conflicting social objectives are sacrificed, among others. Effective programs are
thought to directly and indirectly stimulate the economy sufficiently for the benefits to outweigh
the costs. Ineffective programs spend government funds, or reduce tax revenues, or sacrifice other
social objectives without a commensurate short term and/or long term impact on the economy.
The broadband component of an economic stimulus package should, to the extent possible, be
consistent with both the short term goal of rapid stimulation of the economy and the longstanding,
long term goals and objectives of U.S. telecommunications policy,29 infrastructure policy, and
budgetary policy. There may be tensions among these goals and objectives, which include:
• generating rapid job creation at a time of growing unemployment;
• generating spending at a time that consumer and industry spending is falling;
• fostering the build-out of infrastructure that has positive economic development
externalities;
• fostering international competitiveness;
• providing affordable broadband access to all Americans;30
• fostering the competitive provision of broadband services;
• fostering innovation through a technologically- and competitively-neutral
regulatory framework;
• fostering efficient investment decisions; and
• minimizing open-ended budgetary commitments.
Sometimes these goals conflict with one another. For example, because there are
substantial economies of scale in the provision of broadband networks, it may not be
efficient to support more than one provider in sparsely populated areas where demand is

28 The “Call to Action for a National Broadband Strategy” and a list of signatories are available at
[http://www.bb4us.net/].
29 These are articulated in the Communications Act of 1934, as amended by the Telecommunications Act of 1996 and
other telecommunications-related laws.
30 This has not been a formal goal of U.S. telecommunications policy, but both the Federal Communications
Commission and the National Association of Regulatory Utility Commissioners have been considering expanding the
longstanding policy objective of universal affordable telephone service to universal affordable broadband access
service.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŖȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
too limited to support even one provider without a subsidy. Multiple competing providers
would reduce the scale that any provider could attain, thereby increasing provider costs
and increasing the level of subsidy needed to serve these areas. 31 Both the National
Association of Regulatory Utility Commissioners (NARUC), the organization of state
regulators, and the FCC have been concerned about the costs and inefficiencies
associated with subsidizing multiple providers in high cost areas and have sought public
comment on proposals that would restrict subsidy funding to a single provider that agrees
to be the carrier of last resort for all customers in a geographic area.32 Since these
proposals have tended to give incumbent wireline carriers preferential access to the
subsidy funds, they have been criticized by rural wireless carriers that have more recently
entered the market, who claim they would be placed at an artificial competitive
disadvantage.33
The Rural Utilities Service (RUS) of the U.S. Department of Agriculture (USDA) has had
to address the complexity of dealing with these conflicting policy objectives while
implementing its Rural Broadband Access Loan and Loan Guarantee Program.34 The
USDA Rural Broadband Access statute35 specifies that the program “shall give priority to
eligible rural communities in which broadband service is not available to residential
customers.” RUS has awarded loans for companies to serve areas in which there already
was a broadband provider. Some incumbent broadband providers, typically cable
operators, have complained that they deployed their broadband networks without
government support, that RUS support of competing broadband networks places them on
an artificially uneven playing field, reduces the financial viability of their existing
networks by taking away customers needed to achieve scale economies, and thus
discourages additional investment in their broadband networks. They argue that such
support therefore should be restricted to areas with no existing broadband service. The
new entrants typically have been wireless carriers whose network architectures and
business plans require them to serve broader geographic areas that include both unserved

31 For example, it is possible that, in a sparsely populated area, aggregate demand is insufficient for either a wireline
broadband network or a wireless broadband network to attain the scale economies needed to operate efficiently. To the
extent that customers in that area would view a broadband wireline service and a broadband wireless service as
substitutes, and hence only choose to purchase service from one, then the existence of both a wireline network and a
wireless network would decrease the efficiency – and, without government support, viability – of both networks, and
customers might not gain much benefit from having a second network. To the extent that customers in the area view
broadband wireless service as different from – more of a complement to than a substitute for – broadband wireline
service, then those customers would be more likely to subscribe to both networks, and even though neither network
might be able to achieve sufficient scale to operate without some government subsidy, the total subsidy needed would
be smaller and the benefit to customers from access to the second network would be greater.
32 In the Matter of High-Cost Universal Service Support; Federal-State Joint Board on Universal Service; Lifeline and
Link Up; Universal Service Contribution Methodology; Implementation of the Local Competition Provisions in the
Telecommunications Act of 1996; Developing a Unified Intercarrier Compensation Regime; Intercarrier
Compensation for ISP-Bound Traffic; IP-Enabled Services; and Numbering Resource Optimization, Order on Remand
and Report and Order and Further Notice of Proposed Rulemaking, Appendices A, B, and C, released December 2008,
available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-262A1.pdf].
33 See, for example, In the Matter of High-Cost Universal Service Support; Federal-State Joint Board on Universal
Service; Lifeline and Link Up; Universal Service Contribution Methodology; Implementation of the Local Competition
Provisions in the Telecommunications Act of 1996; Developing a Unified Intercarrier Compensation Regime;
Intercarrier Compensation for ISP-Bound Traffic; and IP-Enabled Services, Reply Comments of the Universal Service
for America (USA) Coalition and the Rural Cellular Association (RCA), posted online at the FCC on 12/22/08.
34 For a detailed discussion of this, see CRS Report RL33816, Broadband Loan and Grant Programs in the USDA’s
Rural Utilities Service, by Lennard G. Kruger.
35 7 U.S.C. 950bb.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŗȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
areas and more populous areas that are already served by a broadband provider in order
to be viable. The RUS has justified granting the loans to these wireless carriers and others
on the grounds that these firms would not meet its financial requirements for a loan if
they could not use the funding to support their infrastructure investments that are used to
provide service jointly in served and unserved areas and also on the grounds that
increased competition is valuable to consumers.
As another example of conflicts among the policy objectives, where broadband service
potentially could be provided over a number of networks that each employ different
technologies, some of which could be deployed more quickly than others, strict
adherence to the goal of technological neutrality may slow down the speed at which
support funds are spent and jobs are created. At the same time, strict adherence to the
goal of rapid job creation could result in steering support to less efficient, but quick to
deploy, technologies, thus distorting capital investment decisions and potentially harming
both competition and innovation. The latter could be very significant if government
support also were conditioned upon the broadband network providing upload or
download speeds significantly higher than those available in most currently deployed
networks, as proposed by some parties.36 Such technical requirements combined with a
short deployment schedule could effectively minimize or exclude support to wireless and
satellite technologies, and perhaps also to cable networks. More generally, it may be
important to ensure that any proposal that would impose multiple eligibility requirements
not, in effect, limit support to a single technology.
Economic regulations generally are implemented to constrain particular behavior or activity that
is perceived not to be in the public interest, or to require other behavior or activity that is
perceived to be in the public interest, but that might not occur if left to market forces. Some of
these regulations may reduce the incentive for firms to invest in plant and equipment because
they constrain potentially profit-maximizing avenues of activity. Providers will have the incentive
to eliminate such constraining regulations. Since there may be tradeoffs between the goals of
these regulations and the goal of fostering investment, a public policy calculus should be
performed, implicitly if not explicitly, to determine if the regulations remain in the public interest.
During troughs in the general economic business cycle, when the potential public benefits from
eliminating any impediments to investment are larger, that calculus may shift toward elimination
of existing regulations, and providers that have been constrained by certain regulations will see an
opportunity to propose such elimination as part of a stimulus package. One of the challenges of
constructing a broadband infrastructure component of an economic stimulus package is to
carefully weigh the long term as well as short term consequences of any proposals to eliminate or
modify longstanding regulations and, if change is deemed appropriate, to construct such change
in a fashion that minimizes the long-term impact of a change intended to address short-term
economic considerations.
There are a number of regulations, and attendant on-going public policy debates, in the
telecommunications area that address such long term objectives as competition, innovation, and
consumer welfare. These include, among other issues, the rights and obligations of

36 For example, the proposal of the Fiber to the Home Council, which would provide substantially more generous tax
incentives for infrastructure providing 100 megabit downstream/20 megabit upstream service. See Jeffrey A. Eisenach,
Hal J. Singer, and Jeffrey D. West, Economic Effects of Tax Incentives for Broadband Infrastructure Deployment,
prepared on behalf of the Fiber-to-the-Home Council, January 5, 2009, available at [http://www.ftthcouncil.org/
UserFiles/File/Economic%20Effects%20of%20Broadband%20Tax%20 Incentives%20010509%20FINAL.pdf].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŘȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
interconnecting networks, the obligations of network providers to make their networks available
to independent applications providers who must use these networks to reach their customers, the
rights of customers to attach their own equipment to networks and to receive the services of their
choice over those networks, and appropriate levels of consolidation of ownership or control. As
explained earlier, some parties have proposed that the modification or elimination of some of
these longstanding telecommunications regulations (or, where deregulation already has occurred,
prohibitions on re-regulation) be included among the broadband infrastructure elements in an
economic stimulus package, in order to stimulate broadband infrastructure investment. The
benefits of increased infrastructure investment should be weighed against any harm to other
policy objectives, including the potential creation of disincentives for investment and innovation
by independent applications providers or restrictions on consumer access to applications. Other
parties claim that the interconnection, open network access, and ownership requirements in the
current regulatory framework are insufficiently strict, and have proposed broadband infrastructure
programs that would tie government support to more restrictive requirements in these areas. Here,
too, a federal broadband infrastructure program should not incorporate changes in the existing
regulations unless analysis demonstrates that those changes are needed to make the support
programs effective and consistent with the overall public policy calculus.
In addition to potential conflicts among goals, there likely will be a limit on the total size,
in terms of budgetary impact, of the broadband component of any economic recovery
package. This likely will require Congress to implicitly or explicitly set priorities among
the public policy objectives being addressed in the package. For example, should
preference be given to programs intended to foster broadband deployment in currently
unserved areas? And, if so, should such support be limited to a single carrier of last resort
or spread among many competitors, none of which could exploit scale economies for
efficiency? Or, given the concern expressed by some that the broadband networks
deployed to date in the U.S. have much lower bandwidth capacity than those in many
other developed countries, which arguably harms our international competitiveness,
should equal priority be given to programs to foster the build-out of higher speed
networks in geographic areas already served by one or more broadband networks?
ž‹•’Œȱ‹“ŽŒ?’ŸŽœȱŸœǯȱ›’ŸŠ?Žȱ‹“ŽŒ?’ŸŽœȱ
One of the complexities of constructing a program to support privately-owned infrastructure is
that the private objectives of each of the providers – to pursue a particular profit maximizing
business plan – may not coincide with one another and also may not coincide with public
objectives. This can make it difficult to construct effective and competitively neutral government
programs to support privately-owned infrastructure.
Government programs are likely to be most effective if they address the most significant
impediments to private providers’ infrastructure investments in a fashion that motivates the
providers to increase their actual investment levels. In markets such as the broadband market
where the various providers use different technologies and therefore have different inputs, costs,
and business plans, however, the providers may not all benefit equally from the same government
actions. For example, providers that use wireless technology might view the release of additional
spectrum for their use, which would allow them to offer services with faster download and upload
speeds, as the government intervention that would most benefit their business plans and most
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗřȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
encourage additional investment.37 In contrast, large incumbent telephone companies, which tend
to have relatively easy access to capital markets, large cash flows, substantial positive income,
and hence sizeable tax liabilities, and also tend to have large infrastructure investment plans,
might find tax incentives (tax credits and/or accelerated depreciation) targeting their infrastructure
investments the most beneficial government support mechanism.38 At the same time, competitive
local exchange carriers, who are less likely to have large tax liabilities to shelter but may have
difficulty obtaining debt financing, especially under current market conditions, might benefit
most from a government loan guarantee or a government program to pay the interest on their
commercial bonds. Rural carriers who want to build broadband networks in sparsely populated
areas, where it is difficult to demonstrate a viable business plan absent government support, might
benefit most from direct grants. Also, the interconnection rights and obligations of some parties
currently are not explicitly defined in statute or regulation because the 1996 Telecommunications
Act that spelled out those rights and obligations could not predict or take into account subsequent
market and technological developments. These parties might benefit most from statutory rules –
or a Congressional mandate that the FCC construct rules – that fully articulate all providers’
interconnection rights and obligations, absent which they may be placed in a weak position when
negotiating with incumbent carriers. All of these different primary concerns suggests that a
competitively neutral broadband infrastructure program might require multiple components.
In addition to conflicting private objectives, there may be times when private objectives diverge
from public objectives and it will be necessary to carefully craft support programs that foster the
public objectives. Consider, for example, a situation in which Congress has identified support for
unserved areas as its highest priority. Given the substantial scale economies associated with
broadband networks, in many situations it will be more profitable for a broadband network
provider to employ its available capital to expand and upgrade its network capability in more
urbanized areas than to extend its network into more sparsely populated unserved areas. In these
situations, if a broadband grant, loan, or tax credit program were created that did not explicitly tie
receipt of support to broadband deployment in the unserved areas, providers would have the
incentive to use that support for their more profitable urbanized network. The FCC attempted to
address this issue in recent proposals to expand the Federal Universal Service Fund (FUSF) to
provide support for the deployment of broadband networks in high cost areas, which it placed in
the Federal Register for public comment.39 Under these proposals, FUSF funding would be

37 The first item listed by CTIA for facilitating the wireless contribution to broadband and infrastructure goals is
“Identifying and allocating additional spectrum for mobile broadband services: Licensed Spectrum = Broadband.” See
“Facilitating the Wireless Contribution to the Obama Administration’s Broadband and Infrastructure Goals,” portion of
a document dated December 9, 2008. provided by CTIA-The Wireless Association to the Obama-Biden Transition
Project, available at [http://otrans.3cdn.net/ 434ec19514a6c44ce1_tfm6bxwzo.pdf]
38 Although the large telephone companies do have relatively easy access to capital markets, Wall Street has not
always reacted well to their large infrastructure capital investment plans. See, for example, Saul Hansell, “Verizon’s
FiOS: A Smart Bet or a Big Mistake?”, The New York Times, August 19, 2008, available at [http://www.nytimes.com/
2008/08/19/technology/19fios.html?_r=1&pagewanted=print]. Substantial tax incentives could ease Wall Street’s
concerns. On the other hand, these large telephone companies tend to enjoy extremely large cash flows that provide
substantial internal funding for infrastructure investment (see, for example, Michael D. Pelcovits, Debunking the Make-
Whole Myth: A Common Sense Approach to Reducing Irrational Telecommunications Subsidies, MiCRA White Paper
#3, commissioned by Comcast, November 17, 2008, available at [httP;//www.micradc.com/news/publications/
pdfs/MP/White_Paper_3_FINAL.pdf]), and therefore substantial tax incentives arguably might not generate additional
infrastructure investment.
39 In the Matter of High-Cost Universal Service Support; Federal-State Joint Board on Universal Service; Lifeline and
Link Up; Universal Service Contribution Methodology; Implementation of the Local Competition Provisions in the
Telecommunications Act of 1996; Developing a Unified Intercarrier Compensation Regime; Intercarrier
Compensation for ISP-Bound Traffic; IP-Enabled Services; and Numbering Resource Optimization, Order on Remand
(continued...)
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŚȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
limited to the provision of service in specifically identified high cost areas, subject to an upfront
commitment by providers to provide broadband service to all customers in the service area within
five years, at 20% increments each year, and with denial of future support if that commitment
were not met. With the same goal, but employing a different approach, Robert Atkinson, president
of the Information Technology and Innovation Foundation (ITIF), has proposed that Congress
institute a two-tiered tax credit consisting of a 30% tax credit to bring broadband services to the
higher-density areas within rural locales that have a population density greater than 20
dwellings/businesses per square mile and a 60% tax credit to bring broadband services to low-
density areas with fewer than 20 dwellings/businesses per square mile.40 But as the earlier
discussion of the RUS programs suggested, when some equipment, such as cellphone towers or
backbone facilities, jointly serves customers in both sparsely populated areas and more densely
populated areas – or in both unserved areas and already served areas – it may be difficult to
identify the extent to which the investment in that equipment qualifies for the preferential
government treatment.
More subtly, there likely will be situations in which public and private objectives partially
coincide. For example, private providers will benefit from a government program that reduces
their costs or uncertainty. But from the perspective of the government, such a program will be
meeting its objectives only if that more favorable environment actually induces the private
providers to undertake additional infrastructure deployment. Bruce Bartlett, a former Deputy
Assistant Secretary for Economic Policy at the Treasury Department, explained this recently:
The trick is to find a way to get people and businesses to spend money over and above what
they would have spent anyway. A stimulus is not a stimulus unless it causes an incremental
increase in aggregate spending. Simply replacing private spending with public spending
doesn’t do any good unless total spending increases in the process.
Since it is just as stimulating to invest money as to buy things with it, it may be possible to
bring forward the plans for future investments that businesses and governments already have.
But, again, it is essential that these investments be marginal – over and above what would
otherwise be spent – or else there will be no increase in aggregate spending, and we will be
no better off.41
Free Press has expressed a similar concern:
In particular, mechanisms should be established to ensure that any tax incentives or grant
monies are used to fund new broadband deployment projects. This requirement will ensure
that the stimulus funds are used to create new jobs, not to prop up the stock prices of
telecommunications companies. (emphasis in original)42

(...continued)
and Report and Order and Further Notice of Proposed Rulemaking, Appendices A, B, and C, released December 2008,
available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-262A1.pdf]. For a detailed discussion of the
Federal Universal Service Fund, see CRS Report RL33979, Universal Service Fund: Background and Options for
Reform, by Angele A. Gilroy.
40 Robert D. Atkinson, “The Right Broadband Stimulus Package,” available at [http://www.huffingtonpost.com/robert-
d-atkinson-phd/the-right-broadband-stimu_b_152884.html].
41 Bruce Bartlett, “How to Get The Money Moving,” The New York Times, December 24, 2008, at p. A21.
42 S. Derek Turner, Down Payment on Our Digital Future: Stimulus Policies for the 21st-Century Economy, Free Press,
December 2008, at p. 6, available at [http://www.freepress.net/files/Down Payment_ DigitalFuture.pdf].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗśȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
In practice, it may be difficult to project before the fact, or to measure after the fact, the extent to
which a tax incentive or a elimination of a regulation induces such incremental spending by the
private infrastructure provider. But it may be possible to construct programs that are more likely
to achieve this.
One potential way is to create incentives for quick spending by limiting the benefit to providers to
investment activities undertaken with a fixed time period of short duration, for example, by
providing a tax credit that expires after one year, thus creating the incentive for providers to speed
up planned infrastructure deployment where possible. Another potential way is to require tax
beneficiaries to provide some proof of increased and/or expedited investment spending. ITIF has
proposed that Congress provide a tax credit on capital expenditures for next generation broadband
networks, “[b]ut to avoid rewarding companies for investments they would have likely made, the
credit should apply to those investments in 2009 capital expenditures that exceed 85 percent of
2008 levels.”43 Similarly, Free Press would require “that any company wanting to take advantage
of tax incentive stimulus policies (such as accelerated depreciation) be required to submit
previous and current capital deployment plans to the Treasury Department.”44 Using previously
planned capital expenditures as a benchmark may be problematic, however, during a period when
the economy is experiencing credit restrictions and a recession, both of which could force a
provider to slow down or put on hold some of its planned expenditures.
Another potential way to increase the likelihood that a government program will actually generate
additional infrastructure investment is to explicitly identify what actions the private providers
must undertake to qualify for the support and to set some penalty for failure to perform (and to
provide the necessary oversight and auditing). In the 1990s, a number of states, in response to
requests from the old Regional Bell Operating Companies (RBOCs) for regulatory relief,
replaced rate of return regulation with price cap regulation, which was expected to foster
investment by allowing the RBOCs to retain earnings above the competitive level when they
reduced costs. In exchange, the RBOCs pledged to deploy optical fiber in the states, but those
deployment goals were never contractually mandated. After the fact, some critics have claimed
that the RBOCs never met the deployment goals and therefore owe the ratepayers billions of
dollars for unmet commitments.45 But none of the state regulatory commission orders specified
what investments the RBOCs had to make incremental to the investments they would have made
in the absence of reduced regulation, and even where a build out schedule was implied or
identified (in terms of the proportion of the population or land area to be served by the fiber optic
network within a particular time period), the orders typically did not include penalty provisions if
the deployment schedules were not met. It is likely to be easier to incorporate explicit build out
requirements and potential penalties in grant and loan programs that typically are implemented on
a project-specific basis than in tax incentive programs or deregulation actions that tend to require
generic implementation rules.

43 Robert D. Atkinson, “The Right Broadband Stimulus Package,” available at [http://www.hffingtonpost.com/robert-
d-atkinson-phd/the-right-broadband-stimu_b_152884.html], viewed on December 31, 2008.
44 S. Derek Turner, Down Payment on Our Digital Future: Stimulus Policies for the 21st-Century Economy, Free
Press, December 2008, at p. 10, available at [http://www.freepress.net/files/Down Payment_ DigitalFuture.pdf].
45 See, for example, Bruce Kushnick, $200 Billion Broadband Scandal, an electronic book that can be purchased at
[http://www.newnetworks.com/broadbandscandals.htm].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŜȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
Ž–Š—?ȱ˜—œ’?Ž›Š?’˜—œȱ
Economic activity generates the need for supporting infrastructure. And, in turn, deployment of
infrastructure increases economic productivity and efficiency, which further increases economic
activity. This positive cycle exists for both publicly owned and privately owned infrastructure.
But large infrastructure projects often cannot be justified, whatever the source of funding, unless
some threshold level of demand exists. This has sometimes led governments to create
development zones, in which commercial and non-commercial entities are provided tax
incentives or reduced rents in order to concentrate enough demand in a particular location to
justify the infrastructure investment. This is one of the principles underlying efforts in Kentucky,
Tennessee, and other states to create public-private partnerships to foster broadband build-out by
clustering enough users in particular locations to create sufficient demand to justify deployment.46
Legislation enacted in the 110th Congress (P.L. 110-385, the Broadband Data Improvement Act)
would, if funded, provide grants to states in order to extend these public-private efforts to
identify, and where needed concentrate, sufficient demand to support broadband deployment in
areas all around the country that now have limited deployment, as well as assisting states in
collecting the sort of demand and supply data needed by these public-private partnerships.
The Benton Foundation has proposed the creation of two federal programs, based on state
programs first developed by the California Broadband Task Force – an Anchor Tenancy program
and a Collocation Facilities program – that would complement such public-private partnerships.
Under an Anchor Tenancy program, the General Services Administration (GSA), which owns or
leases numerous facilities throughout the country that require broadband access, would assess
whether the government-owned or –leased facilities in areas with little broadband infrastructure
could act as anchor tenants, with GSA negotiating telecommunications leases with broadband
providers that would require that the providers extend broadband access to businesses and
households in a specified portion of the surrounding community.47 Under a Collocation Facilities
program, GSA would make available, at cost, small “collocation” spaces on federally-owned
properties in which companies could keep their own equipment needed to connect with both
regional networks and other networks that connect to major Internet connection points in
metropolitan areas.48 In effect, the GSA would provide a space with sufficient power and cooling
equipment to house networking equipment needed by the various carriers and that space would
act as a hub and allow the carriers to enjoy resulting economies of scale or scope.
These programs to create nodes of demand to attract private infrastructure investment likely
would still leave many geographic areas with insufficient demand to justify such investment. If
the longstanding U.S. telecommunications policy of universal affordable telephone service were
to be expanded to a policy of universal affordable broadband service, then that might justify a

46 For a description of these state-level efforts, see discussion of eCommunity strategies at Connected Nation, available
at [http://www.connectednation.org/state_programs/eCommunity_Strategies.php].
47 See John Rintels, An Action Plan for America: Using Technology and Innovation to Address Our Nation’s Critical
Challenge, Benton Foundation, 2008, at p. 38, available at [http://www.benton.org/sites/benton.org/ files/Benton_
Foundation_Action_Plan.pdf], and The State of Connectivity: Building Innovation Through Broadband, Final Report of
the California Broadband Task Force, January 2008, at p. 57, available at [http://www.calink.ca.gov/taskforcereport/].
48 See John Rintels, An Action Plan for America: Using Technology and Innovation to Address Our Nation’s Critical
Challenge, Benton Foundation, 2008, at p. 38, available at [http://www.benton.org/sites/benton.org/ files/Benton_
Foundation_Action_Plan.pdf], and The State of Connectivity: Building Innovation Through Broadband, Final Report of
the California Broadband Task Force, January 2008, at p. 58, available at [http://www.calink.ca.gov/taskforcereport/].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŝȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
program to stimulate broadband demand in all geographic locations, not just where demand can
be created at specific geographic hubs. According to a recent study by the Pew Internet &
American Life Project,49 as of April 2008 55% of adult Americans had broadband Internet
connections at home (vs. 47% in March 2007) and 25% of low-income Americans (those whose
household incomes were $30,000 annually or less) had broadband at home. Traditional universal
service programs have attempted to make telephone service universally affordable both by
keeping the monthly rates for telephone access – in particular, the local subscriber line charge for
connecting to the public switched telephone network – affordable for all customers and by
instituting “lifeline” and “link-up” program to subsidize the monthly basic local charge and initial
connection charge for low income households. Some parties have recommended that a broadband
infrastructure program include an analogous program to subsidize the monthly broadband access
fee and broadband Installation access fees of low income households.50 This subsidy could, but
need not, be included in the Federal Universal Service Fund (FUSF). A proposal that the FCC
published in the Federal Register for public comment, but has not adopted, would create a limited
pilot program within the FUSF.51
But many observers believe that the cost of a home computer – the customer premise equipment
needed to gain access to broadband services – is a greater deterrent to households purchasing
broadband access service. According to an October 2008 study by Connected Nation,52 74% of all
U.S. households own home computers, but computer ownership levels are significantly lower for
specific demographic groups: 44% for households with annual income less than $25,000, 44% for
older households (65 or older), 51% for people with disabilities, 60% for households headed by
adults with no college education, and 64% for African-American households. Some observers
therefore have proposed that any broadband infrastructure package include a subsidy program for
targeted populations to purchase household computers. For example, Free Press proposes an “e-
rate@home program” to subsidize the purchase of laptop computers by schools and libraries that
serve students from low-income households and an “every child online tax deduction program” to
allow households earning less in $60,000 in taxable income who have children in schools that
participate in the e-rate@home program to deduct the cost of home Internet access up to $180 for
the year and to deduct up to $200 for expenditures on laptop or notebook computers.53 In
considering these subsidy proposals, however, it is useful to note what the Connected Nation
study learned about why households do not subscribe to broadband access service. For all non-
broadband households, 44% indicated that they do not need broadband, 32% indicated they don’t
own a computer, 23% indicated broadband service is too expensive, and 14% indicated

49 John B. Horrigan, Home Broadband Adoption 2008, Per Internet & American Life Project, July 2008, available at
[http://www.pewinternet.org/pdfs/PIP_Broadband_2008.pdf].
50 See, for example, Robert D. Atkinson, Daniel Castro, and Stephen J. Ezell, The Digital Road to Recovery: A
Stimulus Plan to Create Jobs, Boost Productivity and Revitalize America, The Information Technology & Innovation
Foundation, January 2009, at p. 6, available at [http://www.itif.org/files/roadtorecovery.pdf].
51 In the Matter of High-Cost Universal Service Support; Federal-State Joint Board on Universal Service; Lifeline and
Link Up; Universal Service Contribution Methodology; Implementation of the Local Competition Provisions in the
Telecommunications Act of 1996; Developing a Unified Intercarrier Compensation Regime; Intercarrier
Compensation for ISP-Bound Traffic; IP-Enabled Services; and Numbering Resource Optimization, Order on Remand
and Report and Order and Further Notice of Proposed Rulemaking, Appendices A, B, and C, released December 2008,
available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-262A1.pdf].
52 Consumer Insights to America’s Broadband Challenge, a Research Series from Connected Nation, Inc., October 13,
2008, at p. 5. available at [http://www.connection.com/documents/ConsumerInsightsBroadbandChallenge.20081013.
pdf].
53 S. Derek Turner, Down Payment on Our Digital Future: Stimulus Policies for the 21st-Century Economy, Free Press,
December 2008, at pp. 25-26, available at [http://www.freepress.net/files/Down Payment_ DigitalFuture.pdf].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŞȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
broadband is not available in their area; among non-broadband rural households, 42% indicated
they do not need broadband, 34% indicated they don’t own a computer; 22% indicated broadband
service is too expensive, and 19% indicated broadband service is not available in their area.54 It is
possible that a survey response of not needing broadband or not owning a computer reflects an
underlying issue of lack of education about how to use a computer and how to use broadband
services, which in turn might limit the effectiveness of subsidies for the purchase of computers or
of broadband access service.
˜—œ?›Š’—?œȱ˜—ȱŠ™’?ȱ›˜Š?‹Š—?ȱ —?›Šœ?›žŒ?ž›Žȱ
ž’•?Ȭž?ȱ
If a primary objective of a broadband infrastructure program is short term economic stimulation –
incremental spending and job creation over and above that otherwise planned by broadband
network providers – then policy makers might want to consider targeting those broadband
network projects that can be quickly ramped up to generate spending and employment beyond the
levels currently in providers’ business plans. As discussed earlier, targeting such investment
projects could come at the expense of promising technologies and projects that are not ready for
immediate deployment.
The availability of deployment-ready technology and financing may not be the only constraint on
the ability of network providers to increase deployment beyond planned levels. Verizon has only
recently been able to deploy its FiOS network in major urban centers because it has taken awhile
for it to find a viable way to bring optical fiber into multi-tenant buildings that have old copper
wire clogging up conduits needed for the fiber.55 It now has received a franchise in New York
City with specific build-out requirements, but it is not yet clear how quickly it will be able to
deploy its network in those difficult to serve buildings. Similarly, Verizon’s efforts to deploy FiOS
in suburban markets has suffered initial delays created by the lack of skilled technicians, which
frequently resulted in residential installations requiring multiple “truck rolls.” The labor skill
level required for broadband deployment likely is higher than that for conventional infrastructure
deployment. Verizon has been exploring ways to minimize truck rolls, or even avoid them
entirely, but to the extent such labor saving actions prove viable primarily when customers are
tech savvy, they may be limited to a small subset of customers for a mass market service.
Many broadband network providers have broadband business plans that rely heavily on the
projected funds generated by multichannel video distribution services they would provide over
those networks. In most cases, these multichannel video distribution services are subject to
regulation as cable television providers, and thus must be awarded cable franchises by local or
state franchise authorities. Although many states have passed laws to allow new entrants (and, in
some cases, incumbent cable companies) to apply for a single state-wide franchise, some
incumbent telephone companies and other new entrants into the provision of cable service still
face franchise applications procedures that can take months to complete and, to the extent that

54 Consumer Insights to America’s Broadband Challenge, a Research Series from Connected Nation, Inc., October 13,
2008, at pp. 7 and 11, available at [http://www.connection.com/documents/ConsumerInsightsBroadbandChallenge.
20081013. pdf].
55 See, for example, Peter Svensson, “Apartments are tougher targets for FiOS,” USA Today, 3/22/07, available at
[http://www.usatoday.com/tech/products/2007-03-22-verizon-fios-apartments_N.htm].
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗşȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
they do not choose to build out their broadband networks absent prior franchise approval, can
delay their broadband build-out by months.
As a result, tax incentives might increase the incentives for network providers to speed up their
network build-outs, but their actual impact on rapid broadband infrastructure deployment might
be constrained at least in the short run by the lack of a skilled technical installation work force
and the local or state cable franchising process.
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŘŖȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
™™Ž—?’¡ǯ Ž™›ŽœŽ—?Š?’ŸŽȱ’œ?ȱ˜?ȱ›˜™˜œŠ•œȱ?˜›ȱ
˜ŸŽ›—–Ž—?ȱž™™˜›?ȱ˜?ȱ›˜Š?‹Š—?ȱ —?›Šœ?›žŒ?ž›Žȱ
—ŸŽœ?–Ž—?ȱ
The following is a representative list of proposals for government support of broadband
infrastructure investment.
Jeffrey A. Eisenach, Hal J. Singer, and Jeffrey D. West, Economic Effects of Tax Incentives for
Broadband Infrastructure Deployment, prepared on behalf of the Fiber-to-the-Home Council,
January 5, 2009, available at [http://www.ftthcouncil.org/UserFiles/File/Economic%20Effects
%20of%20Broadband%20Tax%20 Incentives%20010509%20FINAL.pdf]
The Rural Broadband Initiative: Deploying Next-Generation Broadband Service to Rural
America, a White Paper prepared by the Digital Policy Institute, Ball State University, on behalf
of the Organization for the Promotion and Advancement of Small Telecommunications
Companies (OPASTCO), January 5, 2009, available at [http://www.opastco.org]
Letter of December 18, 2008, from Curt Stamp, President, Independent Telephone and
Telecommunications Alliance, to the Honorable Speaker Nancy Pelosi, Speaker of the House of
Representatives, and the Honorable Harry Reid, Senate Majority Leader, available at
[http://www.ita.us/docs/1218 Congress%20Leadership%20Stimulus%20(121808)pdf0001.pdf]
“Facilitating the Wireless Contribution to the Obama Administration’s Broadband and
Infrastructure Goals,” portion of an untitled document dated December 9, 2008, provided by
CTIA-The Wireless Association to the Obama-Biden Transition Project, available at
[http://otrans.3cdn.net/ 434ec19514a6c44ce1_tfm6bxwzo.pdf]
Speed Matters: A Report on Internet Speeds in All 50 States, Communications Workers of
America, August 2008, available at [http://www.speedmatters.org/document-library/source
materials/cwa_report_on_internet_speeds_2008.pdf]
S. Derek Turner, Down Payment on Our Digital Future: Stimulus Policies for the 21st-Century
Economy, Free Press, December 2008, available at [http://www.freepress.net/files/Down
Payment_ DigitalFuture.pdf]
John Rintels, An Action Plan for America: Using Technology and Innovation to Address Our
Nation’s Critical Challenge, Benton Foundation, 2008, available at [http://www.benton.org/
sites/benton.org/files/Benton_Foundation_Action_Plan.pdf]
John Windhausen Jr., A Blueprint for Big Broadband, an EDUCAUSE White Paper, January
2008, available at [http://net.educause.edu/ir/ library/pdf/EPO0801.pdf]
Robert D. Atkinson, Daniel Castro, and Stephen J. Ezell, The Digital Road to Recovery: A
Stimulus Plan to Create Jobs, Boost Productivity and Revitalize America, The Information
Technology & Innovation Foundation, January 2009, available at [http://www.itif.org/files/
roadtorecovery.pdf]
˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Řŗȱ

—?›Šœ?›žŒ?ž›Žȱ›˜?›Š–œǱȱ‘Š?Ȃœȱ’??Ž›Ž—?ȱ‹˜ž?ȱ›˜Š?‹Š—?ǵȱ
ȱ
Letter of December 19, 2008, from Harlin R. McEwen, Chairman, Public Safety Spectrum Trust,
to the Honorable Barack Obama, available at [http://www.psst.org/documents/PSSTPresident-
elect121908.pdf].

ž?‘˜›ȱ˜—?ŠŒ?ȱ —?˜›–Š?’˜—ȱ

Charles B. Goldfarb
Lennard G. Kruger
Specialist in Telecommunications Policy
Specialist in Science and Technology Policy
cgoldfarb@crs.loc.gov, 7-7252
lkruger@crs.loc.gov, 7-7070

˜—?›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŘŘȱ